California Needs the Cloud

February 2, 2010 Appirio

Ryan Nichols
Last week, TechCrunch guest writer Vivek Wadhwa put out a call to action to California’s entrepreneurs— asking them to step up and “work their magic” to help the state overcome its technology problems, including an infamous $50M project to upgrade an antiquated check processing system that is keeping federal funds from reaching the state’s unemployed. The Silicon Valley community responded with nearly 200 comments, and several entrepreneurs offered to do the entire project for 1/10th the cost and time.

The challenge is a familiar one– nearly every public and private sector organization we work with has a multi-million dollar enterprise application project that is delayed, over budget, and out of date before go-live. And unfortunately, modern technology standards and entrepreneurial spunk are only part of the solution.

The real answer is to get our government agencies out of the business of managing their own commodity technology. The problem of managing outgoing payments is a well understood one, confronted by nearly every enterprise. The fact that nearly 500 thousand lines of COBOL code were written in 2009 alone to modernize this system is a sign that California is working at the wrong level of abstraction– writing code instead of reusing it.

The state of California always needs rain, but this conversation makes it clearer than ever why California needs the “cloud.” That’s what Appirio would propose: we’d put this solution on cloud-based platform like Why create frameworks for workflow, reporting, and UI from scratch? Why not build a solution that uses the shared, secure technology and application platform infrastructure trusted by tens of thousands of other companies?

Here are some examples of public agencies we’ve worked with to do exactly that:

  • Japan Post: When Japan’s largest employer (and the world’s largest financial institution, by assets) needed to modernize its IT, they made the strategic decision to use as a core part of their go-forward architecture. They’re rolling out application after application to nearly 100,000 users across Japan, moving 3-5X faster and savings millions in operating expense every year.
  • A major ministry in Japan had a similar experience. They wanted to launch a consumer-facing rebate program. There wasn’t the budget or the time to build this sort of application on their traditional IT architecture. Instead, we used the workflow engine to build out the registration process, and Google App Engine to handle the generation and emailing of PDF documents. The result? A campaign launched to 20 million consumers, built in weeks, not months.
  • Cities of LA and DC: Email is another example of a common technology that our public instibtutions should get out of the business of managing. The City of DC made the switch in 2008— their CTO, Vivek Khundra, is now the CTO of the Federal Government. Remember that old saying that “no one ever lost their job by choosing IBM?” Now that the city of LA has also made the switch, is it time to say the same about Google?

So given this track record, why isn’t Appirio jumping in with an audacious bid of our own for this project? Well, because the concept of a waterfall development project is as antiquated as the idea of building this solution using on-premise technology. A waterfall is a waterfall, whether a $50M waterfall proposed by an incumbent firm or a $5M waterfall proposed by an aspiring entrepreneur. And California needs a cloud, not a waterfall.

So here’s our offer, California State CIO, Teri Takai and CTO, P.K. Agarwal: a cloud-based prototyping session. Truly agile development is possible when you’re building on cloud platforms, and we’d love to spend a day whiteboarding your problem to determine the best path forward. Before we finish, we’ll show you a functional prototype, built on, and a business-case driven roadmap to put this application on the cloud. Is this a $1M problem, a $5M problem, or a $50M problem? The truth is that none of us know yet. But it’s a sure bet that building on the cloud will prevent you from re-inventing the wheel.

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